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Shanghai banks told to limit loans to property developers: report

Fri, Oct 14, 2016 - 9:13 AM

Banks in China's financial hub Shanghai have been asked by authorities to limit loans to property developers for land purchases and to scrutinise would-be borrowers suspected of trying to access mortgages by getting divorced, the Shanghai Daily reported on Friday.

PHOTO: BLOOMBERG

[SHANGHAI] Banks in China's financial hub Shanghai have been asked by authorities to limit loans to property developers for land purchases and to scrutinise would-be borrowers suspected of trying to access mortgages by getting divorced, the Shanghai Daily reported on Friday.

The steps were the latest in a string of measures around the country to try to cool a property market seen at risk of overheating.

Quoting unidentified commercial bankers, the newspaper said banks were told that housing developers should pay at least 30 per cent down on residential projects instead of relying on bank loans.

It said some developers had put only 10 per cent down on projects and raised the remaining funds through bank and gray-market loans.